Economics 11

Question 2 (Prot Maximization for CBS Production Function) 1 1 Suppose a firm's production function is f (k, l) = kZ + 13. For part (c), (d), (g), and (h), do not show math. Just say increasing, decreasing, or constant. (a) Write down the rm's cost-minimization problem. (b) Find the contingent demand functions for capital and labor. (c) Is contingent demand for capital increasing, decreasing, or constant in 10? In w? In 1:? (d) Is contingent demand for labor increasing, decreasing, or constant in qo? In w? In 17? (e) Write down the rm's prot in terms of k and l (and parameters P, v, and w). (f) Find the unconditional demand functions for capital and labor. (g) Is unconditional demand for capital increasing, decreasing, or constant in P? In w? In 17? (11) Is unconditional demand for labor increasing, decreasing, or constant in P? In w? In 17